Tax, Corruption and Hypocrisy in Brazil

As the Brazilian president Dilma Rousseff presented her speech on International Women’s Day, hundreds of peoplewhacked pots and pans outside their windows in protest. Unhappy ever since the elections in October, some Brazilians have been calling for the impeachment of Rousseff.

Many refer to Operation Car Wash, a billionaire corruption scheme which allegedly deviated money from national Petroleum company, Petrobrás, for personal use or paid off political parties, including Workers Party (PT) of the newly re-elected Rousseff. But before going out on the streets to demonstrate against corruption, we Brazilians should look at ourselves and see how corrupt we are, just as much as we judge the politicians. In order to understand the idea behind the overthrow of the president, it is important to state that this is only a political fight. The left-wing Rousseff got her re-election with 51.64 per cent of the vote, while centre-right Aécio Neves came out 3.5 million votes short, with 48.36 per cent. Furthermore, the leader of Aécio Neves’ died mid-way through the campaign which some claim had an important impact on the election’s final outcome. In addition to this, the ruling PT doesn’t have a clear majority in the legislature and has lost its decision making power in the executive.

Two days before the second turn of the elections in the country, the popular national and openly anti-government magazine Veja claimed that Dilma Rousseff and her predecessor Luis Inácio ‘Lula’ da Silva, also from PT, “knew everything” about the money scandal at Petrobrás.

The quote came from Alberto Youssef, the money changer at Petrobrás, but Federal Police investigations believe that his affirmation was a manoeuvre from his lawyers as well being politically motivated. Still, mainstream media used the cover of Veja and kept attacking the Workers Party and the president. Among them, the biggest mainstream media conglomerate, Rede Globo. With the highest coverage in Brazil, Globo Television was famously criticised for supporting the coup of 1963/64 which resulted in a dictatorship, as well as being boycotted throughout the 2013/14 protests. Globo has since admitted supporting the military coup was a mistake, however it has continued to act against greater media democratisation. In addition to this, Globo also helped elect Fernando Collor, the only president to be overthrown so far due to corruption schemes.

History almost seems to be repeating itself.

Jornal Nacional, the most influential news programme from Rede Globo in broadcast television, created only a superficial report about SwissLeaks. In addition, O Globo, the print version of Rede Globo, also did not investigate the HSBC money scandal to a great extent. When senator Randolfe Rodrigues, from PSOL Party, announced the creation of a senate’s parliamentary inquiry (CPI) to investigate SwissLeaks allegations, he took the opportunity to criticise the media: “Even though Brazil is the fourth in terms of clients with accounts at HSBC and ninth in relation to the amount of money there [from a list of 203 countries] we heard little about this. It is imperative that this issue comes to light.” Jornal Nacional wrote only 59 words about this event.

Why does this happen? Rede Globo has exhibited its conservative sympathies in the past and nowadays utilises strategic manoeuvres to attack the left party which is in charge. The party with the most to gain is the PSDB; the same party which finished second in the 2014 election. Curiously enough, the senators from PSDB did not sign authorisation to create the CPI to investigate SwissLeaks connection with Brazilians. That could be because of a possible link between people involved in the global money scandal and the politicians from PSDB. According to independent journalistic websites in Brazil, there is a connection between Saul Dutra Sabba and HSBC. He was responsible for helping the previous president from PSDB, Fernando Henrique Cardoso, privatise major national companies such as Vale and other energy providers.

Rede Globo does not talk appear to want to talk about SwissLeaks because it may be embroiled in it. It is believed that Edmon Safra, the creator of Safra Bank, is one of the 8,667 names on the ‘secret’ list of HSBC. The bank was used by Rede Globo to buy dollars that would be sent to the Virgin Islands in order to obtain the rights to transmit the 2002 Football World Cup. According to an administrative lawsuit from the Department of Federal Revenue of Brazil against Rede Globo, the network spent a total of R$ 549 million – or $168 million – between May 2001 and June 2002 for that purpose. This money was exempt from tax. On top of everything, O Globo, the newspaper from the same network that may be involved in the HSBC money scheme, is one of two that will help investigate the SwissLeaks. The list was first acquired by Le Monde but the international consortium of investigative journalists decide who has access to the list. The other involved in the investigation is a blogger from the conglomerate Universo Online (UOL) called Fernando Rodrigues. Still people will not go out on the streets and demonstrate against tax evasion from big private corporations like Rede Globo. Although a number of factors inspired the protests in 2013/14.

People are encouraged to decry Operation Car Wash and claim that the Worker Party are solely responsible for corruption in Brazil, together with Dilma Rousseff and Luis Inácio Lula da Silva. Incidentally: according to investigations the Petrobrás scheme started somewhat 15 years ago, which means that it started before Lula was in power and occurred under the rule of Fernando Henrique Cardoso, the previous PSDB president.

Some find it hard to protest tax evasion when they are involved in the practice themselves. All Brazilians agree that taxes are incredibly high in the country. A study made by a consulting company, Brazilian Institute of Planning and Taxation (IBPT), ranked Brazil last in a list of 30 countries when judging the taxation applied and the quality of services provided. It fell behind other South American countries such as Argentina and Uruguay, as well as Greece and Israel.

Furthermore, Brazilian tax evasion is seven times larger than corruption.

Rede Globo may have evaded R$549 million – US$168 million. It is estimated that the Car Wash operation might have claimed something close to R$ 20 billion – or US$ 6 billion. But according to the website quantocustaobrasil.com.br, the total amount of money that did not reach public coffers in 2013 was around R$ 400 billion. That is significantly more than US$123 billion that could have been used to make the country better. The website is organised by the Union of Prosecutors of the National Treasury, known as Sinprofaz.

People, including the rich, or maybe even more than the poor, evade taxation knowing it is against the law and at the same time go to demonstrations to call for an end to corruption. That is hypocrisy. Recently another name from the HSBC list was made public. Her name is Fernanda Mano de Almeida. She is known in social media for being a political activist for PSDB and encourages demonstrations against anti-corruption. Her father, Paulo Cesar Mano Moreira da Silva is also in the HSBC list and is related to a scheme of overpricing subways in São Paulo.

But it is not only Fernanda Mano de Almeida who is a hypocrite. Many protesters are. They want justice when they themselves are being unjust. They demand transparency from politicians when they do not present clear numbers while paying taxes. Brazilians believe that, since taxes are so high and corruption is “generalised”, it is not worth giving money to politicians. It is better to steal from the politicians before they steal from citizens. This way of thinking could not be more absurd and belies an unproductive ethical code around taxation. The pot calling the kettle black. Just like people took a long time to deconstruct the idea that ‘only one cigarette won’t make the entire city dirty’, some believe that the idea of evading just a few dollars will not be felt at the treasury; or in the words of one popular idiom: “the thief who steals from a thief, has a hundred years of forgiveness.”

Sinprofaz has developed the sonegômetro; an internet display that shows in real time how much money is evaded in Brazil. Right now it shows that R$98 billion, or US$30 billion, was evaded in 2015. The website indicates that this amount of money could be used to build and equip 7 million classrooms or 2 million police stations. The demonstration on 15 March would only be positive if Brazilians who go out onto the streets to protest, could change themselves before judging others.

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Robert Born is a Brazilian freelance journalist. He is currently finishing his master degree on War and Conflict in the UK.